The Canada Revenue Agency (CRA) released a report of the mutual agreement procedure (MAP) program—providing a summary of the MAP program for the 2018 calendar year.
Canada was recognized by the OECD's Forum on Tax Administration for its MAP performance in 2018 for:
The CRA concluded fewer negotiable MAP cases in 2018 than in the previous year (126 in 2018, and 141 in 2017). Negotiable MAP cases require negotiation to resolve a tax issue, rather than simply applying a tax treaty's terms. However, in 2018, there was an overall 16% decrease in caseload inventory.
Of the 126 negotiable MAP cases closed in 2018, just over 80% of taxpayers who sought assistance obtained full relief from double taxation, and approximately 6% received unilateral relief. However, in some cases, taxpayers did not obtain relief for various reasons (i.e., their objection was not justified, the request was withdrawn by the taxpayer or the issue was resolved via a domestic remedy, etc.).
Inventories of files
The report also acknowledges the effect of Canada's ratification of the "Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting" (the multilateral instrument of MLI), which took place in August 2019. The MLI entered into force for Canada on 1 December 2019, and it modifies many of Canada's tax treaties and may affect treaty time limits and other MAP-related treaty provisions. For example, the amount of time to request MAP assistance may be extended from two years to three. The MLI also introduces mandatory binding arbitration to resolve certain classes of MAP disputes into some treaties.
The CRA stated it continues to work on updating its MAP and APA guidance.
Read a January 2020 report prepared by the KPMG member firm in Canada
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